Closing prices 01.07.2022
UK Gas and electricity markets
Further volatility last week with the Gas spot prices increasing 20% on Tuesday to 5.8p/kWh in response to rising oil prices. However, on Wednesday constant flows from Norway weighed in which saw prices retreat 14% to 5.3p/kWh. Friday saw day ahead prices rise again by 7% to 5.7p intraday amid high natural gas demand on European markets.
Gas prices for August traded lower towards the end of the week with high LNG deliveries anticipated for the month and demand expected to be low with warmer temperatures here in the UK. Prices for this winter will continue to be volatile with thin liquidity and the risk of Russian flows to Europe stopping. On the flip side US LNG cargoes arriving into Europe may increase in Q4 despite the US regulator not allowing the plant to restart until all risks are addressed to public safety.
Curve prices beyond 2023 are still relatively unchanged as uncertainty in the short term continues to dominate UK energy market headlines.
Other Energy Markets
Brent oil prices declined on Friday due to demand scepticism, mounting concerns about the possibility of a worldwide economic slowdown, and the confirmation by Opec+ of a projected to increase supply. Consequently, Brent fell by 2.8% to settle at $111.63 a barrel. In contrast, WTI price increased by 2.5% on Friday to close at $108.43 a barrel as supply disruptions in Libya and anticipated shutdowns in Norway offset concerns that demand would be negatively impacted by an economic slowdown.
On Friday, EUA prices turned bearish and fell by the biggest daily margin in over four weeks as many traders cancelled their positions to lock in profits in preparation for summer vacation. EUAs expiring in Dec22 decreased by 5.1% to settle at 85.58 EUR/tonne.
Please contact hello@gleg.co.uk for a more detailed market analysis and expert view on how to navigate your energy procurement strategy through the current market volatility.